How MSPs Can Build an Effective Referral Program

For years, Managed Service Providers (MSPs) have relied on referrals as their top lead generator. 

Did you know that 88% of consumers trust referrals from people they know?
(* Nielsen’s Global Trust in Advertising Survey) 

For MSPs, these referrals can be the lifeblood of new business. Not only are referrals highly cost-effective but they also consistently provide a higher-quality of lead. So even though  marketing strategies and initiatives are becoming increasingly more digital across the board, the humble referral remains the cornerstone of an MSPs’ sales strategy.

Studies suggest businesses often don't maximize their referral potential and see the whole process as passive. They may have the sense that the quantity of referrals they can get is limited in nature. A reliance on a small, tightly-knit market or a client base that isn’t growing might further strengthen this misconception.

The question is: How can MSPs generate more of them?

“My partner and I exhausted our referral networks, and we realized that we didn’t know where our next client would come from.” - John, a Feel-Good MSP partner

First and foremost, – you can’t outrun a lack of sales process. It will eventually catch you. MSPs need a reliable, proven process to give their sales team that generates multiple consultations a week to bring on new clients every month. That’s something we help MSPs with here in our online workshops and sales accelerator program. 

Once you’ve got that in place there are the standard tactics that every MSP should employ to gain referrals. But today we’re talking about taking it to the next level with your own Referral Program. I want to give you some key consideration to keep in mind when designing your own specialized offering for customers and partners;

• Define your goal. Which types of clients are you targeting? Clearly defining your Ideal Customer Profile (ICP) will help you focus on the right referrals. Say for example your ideal client is a small business with 20-50 employees in the healthcare industry; that’s a nice start - you’ve defined some demographic traits, but overall a small percentage of a clearly defined ICP. You have not yet sunk your teeth into developing it to your benefit.

• Choose an incentive. Conduct a cost analysis to determine the type of incentive you can offer and the terms for compensating referrers. The reward should be compelling, relevant, and easy to fulfill on your end. This might include discounts on future services, add-ons, gift cards, charitable donations made in the referrer’s name or something completely unique.
   
• Promote your program. Create a communication plan to inform your network about the program. Clearly outline its guidelines, including how to submit referrals and the associated terms. You might consider a referral landing page where you can send interested contacts from your emails, announce it on your home page and social media platforms - get creative with it.. Take advantage of your marketing to showcase some successes.
   
• Track performance. Use a system to monitor referrals and their sources. Treat your referral program as a marketing campaign, and leverage the insights you gather to refine future strategies and deepen your professional relationships. Use your CRM and other applications to track referrals and their sources, conversion rate, lifetime value, and other metrics. Over time you can also gather some insight on which incentives worked the best for your clients.

It’s not just about more leads - it’s about building a community that actively fuels the improvement and growth of your organization. Referrals can become your secret weapon for attracting high-quality, low-cost leads that come through the door without feeling overly defensive. When MSPs put the right sales process in place, referrals naturally start to appear more often. The dynamic changes from a lucky break to a steady stream of new opportunities. 

By clearly defining your Ideal Customer Profile (ICP), crafting powerful incentives, and clearly communicating to clients how they can leverage this referral program, MSPs can unlock a new level of growth while rewarding those who champion their services.

Ready to make referrals work for you? With these steps, you'll turn your network into a powerful lead-generating engine.